The Weaponized Lawsuit against the Media: Litigation Funding as a New Threat to Journalism

Levi, Lili, American University Law Review

Introduction

From Donald Trump's vituperative threats against the press during the 2016 presidential election,1 to judicial distaste for modern journalistic practices,2 to declining public esteem for a self-sabotaging press,3 news organizations today are facing a war against the media. An important new salvo in that war is third-party litigation funding supporting proxy plaintiffs' tort actions against the press. Wealthy private donors, seeking to shut down outlets they dislike, are inaugurating a modern wave of censorship-by-litigation.4

These third-party litigation funding5 developments in the press context have led to public debate. Some view such litigation support as a powerful threat to freedom of the press;6 others express concern, but do not view it as a major danger yet;7 and still others affirmatively applaud it as an instance of the tables being turned against an increasingly unaccountable and sensationalist media undeserving of special constitutional treatment.8

While third-party funding in media cases can theoretically help poor but meritorious plaintiffs, in reality it can too easily distort the litigation process and threaten chilling effects for an already weakened and financially unstable press.9 The challenging

environment in which modern media operate amplifies the hazards posed by lawsuits brought not to impose reasonable costs for journalistic error, but to cripple or completely shutter certain kinds of press voices.10 Procedural hurdles, such as apparent limits on disclosure obligations and financially prohibitive appeal-bond requirements, amplify the problem.11 All told, a chilling effect on journalism is a predictable consequence. we should take no comfort from the apparent paucity of such cases at this point; secrecy makes outside financial support of strategic actions against the media difficult to discover. success in a few cases could reinvigorate a plaintiffs' bar looking for opportunities to sue the media going forward. That will surely not escape the press's notice.

The problem is figuring out the right solution-a surprisingly complicated task. Third-party funding cannot realistically (and should not) be prohibited per se only in press cases. At a minimum, our system allows too many instances of interest-group funding to be able to carve out a workable press exception, even if there were an appetite to protect the press especially.12 Recent U.S. Supreme Court precedent, not to mention lower court activity, casts doubt on constitutional recognition of press exceptionalism.13 Moreover, attempts to prohibit funding in ideological actions against the press would surely raise non-trivial First Amendment-based objections from the funders and plaintiffs. Traditional champerty and maintenancebased objections to non-plaintiff funding of litigation cannot provide uniform relief either because many jurisdictions now view such prohibitions on champerty and maintenance as anachronistic.14 Relying on attorneys' professional conduct rules is also unlikely to be effective in disciplining third-party funding in media cases, at a minimum because the rules permit informed consent by clients.15 Moreover, we should not lose sight of the possibility that third-party funding of suits against the media might sometimes provide social and journalistic benefits.16

So, what is to be done? This Article suggests a four-pronged approach. First, the law should clearly recognize that courts have the discretion to require disclosure concerning at least the existence of third-party funding from the parties as a matter of discovery.17 This disclosure could provide important information not just to the court and defense,18 but also, where disclosure would be appropriate and consistent with privilege, to the public at large. Where general disclosure is possible, the public would have the opportunity to understand the full context of the third-party-funded action at issue against the press. The proposed disclosure approach would not conflict with constitutional commitments, including the First Amendment's petition rights, protection of anonymous speech, or prohibitions of compelled speech. …

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